TLDR: Your reference tax income (RFR) is calculated from your net taxable income. Certain income, allowances and expenses are then added back, in particular income from movable capital subject to a final withholding tax, the 40% allowance on dividends and retirement savings contributions deducted from overall income.
Allowances taken into account
The calculation of the RFR may include certain deductible allowances, in particular:
- the 40% allowance on dividends;
- the allowance for holding period provided for in 1 ter of Article 150-0 D of the French General Tax Code, where it applies to certain gains on movable assets.
This holding-period allowance is added to the net income and gains used to establish income tax.
It does not apply to the calculation of social security contributions. For these contributions, net gains, additional consideration and taxable distributions are taken into account at their gross amount.
The income and expenses concerned
Certain income subject to a final withholding tax may be added to the RFR, in particular income from movable capital.
Certain expenses deductible from income may also be taken into account, in particular retirement savings contributions and premiums deducted from overall income.
If you are a micro-entrepreneur and have opted for the final withholding payment, the administration calculates your net profit after deducting the flat-rate allowance. This net profit is used to calculate your RFR.